5. Say whether it is true or false:

1. It isn’t difficult to give a full and accurate definition of economics.

1. There are two main approaches to economics.

1. Economics uses models to understand economic problems.

1. It is possible for an economist to include all the detail in a model.

1. The economist usually follows one rule when he makes a model of economic behaviour.

6. Complete the following statements:

1. There are three main approaches to economics …

1. There are several specialized areas of study …

1. A model often helps an economist to …

1. It is not possible for an economist to …

1. A model usually includes …

IV. Post-reading activities

1. Discuss with your partner the text “What is Economics?”

1. Be ready to speak about economics.

V. Written task Translate into Russian using a dictionary.

History of economics

In the 1500s there were few universities. Those that existed taught religion, Latin, Greek, philosophy, history, and mathematics. No economics. Then came the Enlightenment (about 1700) in which reasoning replaced God as the explanation of why things were the way they were. Pre-Enlightenment thinkers would answer the question, “Why am I poor?” with, “Because God wills it”. Enlightenment scholars looked for a different explanation. “Because of the nature of land ownership” is one answer they found.

Such reasoned explanations required more knowledge of the way things were, and the amount of information expanded so rapidly that it had to be divided

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or categorized for an individual to have hope of knowing a subject. Soon philosophy was subdivided into science and philosophy. In the 1700s, the sciences were split into natural sciences and social sciences. The amount of knowledge kept increasing, and in the late 1800s and early 1900s social science itself split into subdivisions: economics, political science, history, geography, sociology, anthropology, and psychology. Many of the insights about how the economic system worked were codified in Adam Smith's The Wealth of Nations, written in 1776. Notice that this is before economics as a subdiscipline developed, and Adam Smith could also be classified as an anthropologist, a sociologist, a political scientist, and a social philosopher.

Throughout the 18th and 19th centuries economists such as Adam Smith, Thomas Malthus, John Stuart Mill, David Ricardo, and Karl Marx were more than economists; they were social philosophers who covered all aspects of social science. These writers were subsequently called Classical economists. Alfred Marshall continued in that classical tradition, and his book, Principles of Economics, published in the late 1800s, was written with the other social sciences in evidence. But Marshall also changed the question economists ask; he focused on the questions that could be asked in a graphical supply-demand framework. In doing so he began what is called neo-classical economics.

For a while economics got lost in itself, and economists learned little else. Marshall's analysis was downplayed, and the work of more formal economists of the 1800s (such as Leon Walras, Francis Edgeworth, and Antoine Cournot) was seen as the basis of the science of economics. Economic analysis that focuses only on formal interrelationships is called Walrasian economics.

УЧЕБНЫЙ ЭЛЕМЕНТ 2 (УЭ-2) THE ECONOMY OF SMALL NATIONS